Dave Moskovitz on NZ's ‘chaotic maturity’, why size is our unfair advantage, and why Silicon Valley isn’t all it’s cracked up to be

Describing an interviewee’s achievements as ‘too many to mention’ may not be the most elegant way to begin an Idealog story, but when your subject is Dave Moskovitz, ‘the Godfather of Wellington start-ups’, that description is about as accurate as you can get.

An experienced entrepreneur turned angel investor, founding investor of Lightning Lab and accomplished supporter of many a New Zealand start-up, Moskovitz is considered something of an icon of the Wellington start-up scene, and rightfully so. He’s supported more early-stage companies than you can shake a stick at, he’s an experienced director, plus he’s a prolific communicator, commentator and organiser of New Zealand’s entrepreneurial milieu.

He’s also, reportedly, a dab hand in the kitchen.

We're impressed by credentials like that, so Idealog decided to appropriate 45 minutes of Moskovitz’s time to find out what’s right and what’s wrong with New Zealand’s start-up culture, why Moskovitz thinks New Zealand’s Number 8 wire mentality actually works against us, and, at the end of the day, how Silicon Valley’s got nothing on good old Enzed.

Idealog: Hi Dave. Day in, day out we hear about how New Zealand, and particularly Auckland, needs to start thinking of itself, and branding itself, as an innovation hot bed. What do you think about that idea? Is that really an accurate way to describe this country? Or is a bit of wishful thinking at play here?

Dave Moskovitz: Well, I think there is a great start-up/entrepreneur culture in New Zealand – particularly in Wellington – that’s really blossoming, and has really blossomed in a big way over the last five years. Five years ago you could count the number of start-ups in your head, now you just can’t. It’s the ‘chaotic maturity’ of the scene. It’s continually shifting and changing, so we definitely do have that culture in New Zealand.

In regards to Auckland as an innovation hotbed, it is to some degree, but there are a lot of other places that are as well. It’s certainly not a case that we can rest on our laurels, because we can’t. We need to race hard just to keep up.

So while I applaud the efforts of government and central government, of the people out there doing the hard yards, the entrepreneurs, putting their houses on the line, working a hundred hours a week, losing their friends through that single-minded doggedness, we have to remember that there are other people out there [globally] making those same sacrifices too.

Image: Dave Moskovitz

Good point. So, at the end of the day, are we just like everybody else? Or do we have our own unique strengths as New Zealanders when it comes to innovation? What have we got going for us?

There are a couple of things. One is our scale.

Scale? How can that be? We’re a dot at the bottom of the world!

Well, the thing is we actually have a really manageable, friendly scale, Wellington in particular. I can walk down Courtenay Place and run into five start-ups doing their own thing. We have genuine goodwill in this community. People get together, exchange ideas, have a beer, share triumphs and problems – it’s as friendly as you can get in the world. We’re a ‘small town’ in New Zealand, comparatively speaking. It is a small number of people making this stuff happen, and the way we all support each other, that is a real competitive advantage.

I never looked at it that way. We seem to think about the internet as this great eradicator of distance, but regardless of these technological advances, Silicon Valley is still a very long way away from Courtenay Place.

It is, and that distance from the rest of the world is a strange advantage. We’re not caught up in the sort of bubble that exists in Silicon Valley. Over there, everyone’s doing an Uber for something, everybody’s basically ripping off the same ideas, and people can get funding without really doing a lot of work. In New Zealand you really have to be doing something. You’re forced to be more real. Because we’re far away, we’re not constrained by those same sorts of thinking.

Okay, but what’s the other side of the coin? What’s the classic mistake that Kiwis always make?

Not thinking about being global from day one and relying on people you know instead of the best people for the job.

Look, I think New Zealand produces great engineers, smart entrepreneurs, and the people are really capable and resilient. These are the basics that make a great entrepreneur society, but where we often fail is when it comes to scaling. We lack the global experience and resources to really take our companies global, but that is just a matter of time. I’m looking forward to the day when Kiwi entrepreneurs that have made it onto that stage are coming back and bringing that experience with them. That experience is critical, but you can’t wave a magic wand. It has to happen over time.

It might be difficult for us to scale fast, but we have to do it. If we don’t, we’ll be completely overtaken by the rest of the world. It’s hard work and it will take time, but we need to do it anyway.

So why isn’t this happening already? I can’t help but think that sometimes we just don’t have the guts to really get out there and sell ourselves.

Well, the rest of the world is lot closer than people think. You can get to Australia and back for $500. You can get to the US for less than a couple of grand if you get the right flights. It is more of a mental barrier than a financial or physical one. It’s the mind-set that’s holding us back. People are afraid in some ways, because it’s overwhelming. It’s not the friendliest environment. You really have to put yourself out there and that can be scary. So I think it’s an internal psychological block rather than a physical one.

While the internet can bring us together, there’s no substitute for face-to-face. If you’re in B2C and selling things for 99c, you can run that from anywhere in the world, but if you’re closing distribution deals worth hundreds of thousands of dollars, people will want to see who you are. They’ll often want someone there, and that can be expensive.

You’ve said before that “the number 8 wire mentality is killing us” when it comes to getting our ideas out there. Which is blasphemy, obviously...

The issue is that everyone is good at innovating, but when it comes to scaling those ideas we haven’t cultivated the thinking needed to get onto the world stage.

People say: ‘We’ll do a start-up, we’ll do it in Wellington, then we’ll take it to Auckland, then we might take it to Sydney’. Okay so you’re tackling a market of four million? But what about the other seven billion? You need to think like global company from the beginning, and that means thinking about that scalability. The Number 8 wire approach might work if you have a thousand customers, but if you have million, it might not work as well.

Something you’ve said recently is that New Zealand shouldn’t try to replicate Silicon Valley. Isn’t Silicon Valley the brass ring we’ve been working towards all this time?

The fact is, we can’t do it. It’s not a tractable problem. Silicon Valley has several of the world’s best universities, right there. They have tremendous amounts of wealth we don’t have, a technology culture that permeates through the place, the infrastructure. We can work towards it, but we just don’t have the critical mass.

And is that even what we want to be? Personally, I like easy access to the outdoors, the clean green environment, the people here. The relationships here are very different from the relationships you form in Silicon Valley. I don’t want to make New Zealand the next place where people working together just use in this thin veneer of pleasantry.

In terms of the pollution problems in Silicon Valley, we don’t have the sorts of problems associated with the Silicon Valley tech industry, and we don’t want them either. And wealth disparity. We don’t want this situation where there’s fabulously wealthy people and fantastically poor people living side-by-side. We don’t have that here. And I think that comes down to Kiwis wanting to look after people. You don’t get that in Silicon Valley.

We should take the values we have here and build on that, not just follow Silicon Valley just because it’s shiny and big. I don’t really think we want that.

Really, be careful what you wish for.

So what’s the biggest challenge facing New Zealand start-up culture at the moment? What do we need to do to be taken seriously on the world stage?

We just need to get on with building on our successes. We need to get to the point where we’re recycling that talent and capital back in to New Zealand, but that’s not going to happen quickly.

A lot of people are really interested in branding Auckland as New Zealand’s innovation hub, but something tells me that you’re probably placing bets on Wellington. Am I right?

Well, I don’t buy into the rivalry. At the end of the day we’re one country of four million people, so the trick is really delivering on that promise.

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